Stimulus Update: Why the U.S. Is One of the Worst Developed Countries to Raise a Child In
- Out of 41 countries analyzed by Pew Research, the U.S. is the only country that does not provide paid parental leave.
- The U.S. is the only industrialized country that does not provide universal healthcare.
- Annually, the U.S. spends only $500 per child on early childhood care, leaving the rest to families.
The U.S. is the most powerful country on Earth. Still, when it comes to poverty, children are largely on their own.
Granted, hopes for the renewal of the expanded Child Tax Credit are not dead. Whether it's President Biden's version, Sen. Mitt Romney's version, a compromise of the two, or nothing at all -- it's still very much up in the air. Chances are, we'll have to wait until after the midterm elections to see.
In the meantime, it's interesting to note how other industrialized countries use tax dollars to ensure that children have their basic material needs met.
What research reveals
Last year, six months' worth of expanded Child Tax Credit payments lifted an estimated 3.7 million American children out of poverty. Families had more money in the bank to provide for their children's basic needs. But on Jan. 1, 2022, those families were once again left to their own devices as Republicans in Congress refused to extend monthly Child Tax Credit payments.
According to a new study from Columbia University, the monthly child poverty rate jumped from 12.1% in Dec. 2021 to 17% in Jan. 2022 when Child Tax Credit payments ended. The study shows that all those children living in poverty before the expanded Child Tax Credit slipped right back in.
Taking care of the kids
And it's not just the lack of Child Tax Credit payments impacting families. It's downright expensive to raise a child in the U.S., made worse by the lack of paid parental leave and the high cost of daycare. Plus, the U.S. is the only industrialized country without universal healthcare.
Compared to other nations, the U.S. does not come close to providing for children like other countries do. For example, according to the Organization for Economic Cooperation and Development, and Elizabeth Davis and Aaron Sojourner for the Hamilton Project, the annual public spending per child on early childhood care in the U.S. is $500. In contrast:
- Norway spends over $29,000 per child
- Finland invests over $23,000 per child
- Germany pays over $18,000 per child
- Even Chile -- a relatively poor country -- spends more than $8,000 per child on early childhood care
What other countries show is that it's possible to prioritize families. As the federal budget is debated, supporting children can become a priority. Here's a sample of what other countries do. Keep in mind that this is only part of what these countries provide.
Parental leave in Canada can stretch to 78 weeks after giving birth or adopting. In addition, families receive $569 per month for each eligible child under the age of 6 and $480 per month for kids aged 6 to 17.
Danish families receive $673 each quarter for every child under 18. Plus, new moms get a guaranteed 52 weeks of leave following the birth or adoption of a new child.
New mothers receive full pay for 44 weeks after giving birth. If they opt to take 54 weeks off, they receive 80% of their income. To encourage fathers to get involved, Norwegian dads must take at least six weeks of parental leave or risk losing six weeks of family payments. Once a child is born, a couple receives $123 per month until the child is 18. If a single parent raises the child, the amount is doubled to $246 per month. Finally, daycare is available for up to 10 hours per day, and the maximum fee is capped at $290 per month.
Swedish families receive $136 per child. Once giving birth, parents get 480 days of paid parental leave. The government guarantees 240 days of paid leave each when there are two parents.
Universal child benefits (or "child allowances")
Many governments worldwide offer child-related subsidies. However, these countries stand out for providing citizens with allowances that can be used for anything, from paying for soccer camps to investing for future goals. Excluding the countries already mentioned, here are some of the other nations providing income to families with children:
Each country has devised a different way of determining which households receive a full monthly payment. For some, it's income based. For others, everyone receives the same amount.
There's no doubt that the U.S. is a great nation. The question is whether it will use that greatness to come up with a plan of its own that will benefit parents and children.
Alert: highest cash back card we've seen now has 0% intro APR until 2025
If you're using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2023 The Ascent. All rights reserved.